Nm Pte Return 2023-2024 Form

Instructions and help about New Mexico's Elective Pass Through Entity Tax Regime

BOX. AS TAX SEASON GETS UNDERWAY, ONE DEDUCTION CONTINUES TO BE A THORN IN THE SIDE OF MANY ACROSS THE COUNTRY. EVEN THOUGH DEMOCRATS FAILED TO REMOVE THAT $10,000 CAP, ONE GROUP OF AMERICANS MAY HAVE FOUND A WAY TO MAKE THAT DISAPPEAR. HOW DO YOU DO THAT, LITTLE MAGIC TRICK? >> YEAH, IT IS MAGIC, ANDREW MORE THAN 30 STATES HAVE NOW PASSED THESE SPECIAL LAWS ALLOWING A SPECIAL WORK AROUND OF THE SALT CAP. IT IS CALLED THE PASS-THROUGH ENTITY CAP THE PASS THROUGH PAYS AN EXTRA STATE TAX. IT TAKES THE FULL FEDERAL TAX DEDUCTION. THEN PASSES THAT DEDUCTION ON TO THE OWNER THROUGH A CREDIT OR INCOME EXCLUSION SO THE RESULT IS THE OWNER GETS AN UNLIMITED DEDUCTION ON THEIR STATE BUSINESS INCOME TAX. NOW, THE BIGGEST BENEFICIARIES ARE HEDGE FUND MANAGERS, PRIVATE EQUITY PARTNERS, LAWYERS, DOCTORS, THE IRS APPROVED THIS LOOPHOLE IN 2020, BUT CRITICS SAY IT IS COSTLY AND UNFAIR. MOST OF THE BENEFITS GO TO THOSE MAKING MORE THAN $1 MILLION A YEAR THE TAX POLICY CENTER SAYING TAXPAYE